State Department Says Russia Hit By 'Real Economic Pain' Over Crimea

Armed
men, believed to be Russian soldiers, stand guard outside a
Ukrainian military base in Simferopol March 19, 2014. Defying
Ukrainian protests and Western sanctions, Russian President
Vladimir Putin signed a treaty in Moscow on Tuesday making Crimea
part of Russia again, but said he did not plan to seize any other
regions of Ukraine.REUTERS/Thomas
Peter

Russia's intervention in Crimea has cost it "real economic pain,"
the United States said Wednesday as it readied a new slew of
sanctions to punish Moscow for taking over Ukraine's southern
peninsula.

"The question at this point is not if we will do more sanctions,
it's when," State Department spokeswoman Jen Psaki told
reporters.

On Monday, Washington rolled out a series of sanctions against 11
mostly Russian officials, including seven of President Vladimir
Putin's inner circle.

Psaki insisted there has been "a huge economic impact" following
Moscow's intervention in Crimea.

Asked about reports that the whole 450-member Russian Duma has
responded by calling on the US to sanction them, Psaki retorted:
"Be careful what you ask for."

Publicly, Russian officials have laughed off the US sanctions,
which freeze their assets in the US, despite similar travel bans
and sanctions imposed by the EU.

But Psaki hit back "that there is real economic pain, and if
President Putin cares about the economy in his country, cares
about the economic impact on the people of his country, cares
about his place in the world, then those are all factors that
should be looked at."

She reeled off a list of figures, including that Russian stock
indexes plunged 17 percent Friday to their lowest levels since
2009, and that the ruble has hit a five-year low against the
dollar.

"Russia's 19 richest people lost $18.3 billion due to stock
market volatility on March 3 -- the first day of trading after
the beginning of Russian military intervention in Crimea," Psaki
told reporters.

"More capital has already fled Russia this year than in all of
2013. And finally, forecasts for Russia's 2014 growth rate hover
around under one percent. Some even predict a negative growth
rate."

It remains unclear when more US sanctions could follow, but
President Barack Obama has called for the EU and the G7 group of
most industrialized nations to meet on Ukraine next week in The
Hague.

Britain announced Tuesday that it had suspended all military
cooperation with Russia and halted export licences for military
material.

And Germany halted a major deal to provide a fully equipped
training camp to Russian forces reportedly worth about $140
million.

US officials hope that they can force Putin's hand by keeping up
the threat of even more sanctions.

"I wouldn't, if I were you, invest in Russian equities right now
-- unless you are going short," White House spokesman Jay Carney
said earlier this week.